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Profitability Tips For Appliance Repair Businesses

May 24, 2016 4 min. read
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Appliance repair professionals have to be excellent at investigating and problem-solving in order to do their jobs well. If those same skills are applied to business operations, we can find ways to improve overall profitability.

From optimizing your team in the field to using technology, we review 6 ways to increase the profitability of your appliance repair company:

Review First-Time Completion Rates

Every time you have to take multiple trips to a job to get the problem fixed, your profitability is greatly reduced. There are several steps you can take to try to reduce the possibility of having to go back to a job:

Look at your intake process. Make sure that you have a system to obtain all of the necessary information when scheduling the job including the make and model number of the appliance, what is wrong with the appliance, and past history with issues. As you create a system to gather all of the information, add any other pieces of information that you discover is helpful to ensure a high first-time completion rate.

Examine the process that your technicians use to ensure that their truck has the correct parts on it before they leave in the morning. If your technicians have a good list of the types of appliances and problems they will be working on for the day, they will have a better chance of packing the right parts and equipment with them.

Examining first time completion rates by technicians will also help you identify areas where additional training may be needed. If you have some technicians with great first-time completion rates and others with lower rates, use your investigative skills to find out why.

Analyze Your Warranty Contracts

There are many different manufacturer and home warranty contracts to support in the appliance repair business. If you don’t carefully analyze your costs of doing a job versus the amount of revenue you are collecting, you may find that warranty work is really hurting your profit margin.

To do this analysis, you need to know your how much your repair parts cost, your labor costs (including payroll taxes, benefits and work comp), your vehicle costs, and a share of any other costs that go into completing a job (for example small tools). You may find that the profit you are making on some warranty contracts is so small or nonexistent that they are not worth doing as currently written. Do not be afraid to try to renegotiate the terms of the warranty contract in your favour.

Standardize or Review the Pricing Your Technicians Apply in the Field

Some appliance repair businesses have standardized pricing they expect their technicians to follow. Others allow their technicians to bid jobs in the field based on a suggested methodology. Either way, make sure that your technicians are pricing correctly. If you have just one technician consistently pricing at $50 less a day that the rest of your team, that can cause lost profits of $12,500 a year!

READ MORE: Appliance repair technician certification

Control Unused Parts

Developing a process to ensure that unused parts don’t get lost in the shuffle can help you reduce your cost on parts. It is easy to head home at the end of the day without unloading unused parts out of the field trucks, particularly if the parts won’t be needed the next day.

However, with proper processes to ensure that these unused parts are tracked, returned to the supplier where possible if unneeded, or kept available for the next job and not lost in a truck, you can reduce your costs of repair parts.

FREE TOOL: Try our free appliance repair invoice generator

Optimize Your Routes to Save Vehicle Costs

Reducing the travel distance between jobs can decrease the amount of time (and labor costs) it takes to complete a job. An additional benefit is that optimized routes will mean less wear and tear on your vehicles. Jobber’s route optimization feature is a great way to efficiently schedule your team and make sure their time is optimized for maximum productivity.

Perform Routine Maintenance on Your Vehicles

We all know that preventative service on our vehicles can make them last longer and operate more efficiently. Ensure that your fleet has routine maintenance including oil changes, proper tire inflation, tire replacement, and any other recommended maintenance to avoid unnecessary vehicle costs.

Implementing these steps and becoming more profitable takes time. Investing in software for your appliance repair business, reviewing these opportunities and delegating tasks to your team is a great start – your profitability depends on it!

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